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Clean Industrial Deal
In February 2025 the European Commission published its leading policy communication to kick-off the new European regulatory cycle. The Clean Industrial Deal is a comprehensive strategy aimed at bolstering Europe's industrial competitiveness while advancing decarbonisation efforts. The initiative is a response to rising geopolitical tensions, slow economic growth, and global technological competition.
The Clean Industrial Deal outlines six business drivers: affordable energy, lead markets, financing, circularity and access to materials, global markets and international partnerships, and skills. It includes measures to lower energy bills, accelerate the roll-out of clean energy, and ensure well-functioning gas markets. The CID also promotes the uptake of renewable and low-carbon hydrogen and supports public and private investments in the clean transition.
The strategy emphasises the importance of skills and quality jobs for social fairness and a just transition. The Clean Industrial Deal also includes sector-specific plans for industries such as automotive, steel and metals, chemicals, sustainable transport, bioeconomy, and ocean innovation.
The CID addresses the importance of securing affordable energy for Europe's competitiveness, especially for energy-intensive sectors. It addresses the challenges posed by Europe's dependence on imported fossil fuels and the need for structural reforms to reduce energy costs. The chapter outlines an Action Plan for Affordable Energy, which includes measures to lower energy bills, accelerate the roll-out of clean energy, and ensure well-functioning gas markets.
The plan also focuses on creating lead markets for European clean technologies and products to enhance the EU's global competitiveness. It highlights the importance of public procurement policies, non-price criteria, and incentives for private purchases to support sustainable and resilient industrial ecosystems. The chapter also emphasises the role of renewable and low-carbon hydrogen in decarbonising the EU energy system.
The Communication discusses the need for significant investments to support the clean transition of the EU economy. It highlights the importance of mobilising private capital, leveraging public incentives, and ensuring long-term regulatory stability, outlining various funding mechanisms, including the Innovation Fund, the Industrial Decarbonisation Bank, and InvestEU, to support industrial decarbonisation and clean tech manufacturing projects.
Regarding circularity, the plan discusses the need for strategic procurement of raw and secondary materials, the implementation of the Critical Raw Materials Act, and the adoption of a Circular Economy Act. It also highlights the potential of the European remanufacturing market and the importance of recycling and reusing materials to enhance resource security.
The CID highlights the importance of international partnerships in achieving the objectives of the Clean Industrial Deal. It discusses the need for clean trade and investment partnerships, the improvement of the Carbon Border Adjustment Mechanism, and the promotion of a level playing field for the EU industry. the Communication also emphasises the role of the EU's vast network of trade agreements in securing access to third markets and essential inputs.
Lastly, the plan recounts the importance of skills and quality jobs in ensuring a just transition. It discusses the need for better access to skills, support for workers in the transition, and the promotion of social fairness. The chapter outlines various initiatives, including the Union of Skills, the Quality Jobs Roadmap, and the European Fair Transition Observatory, to support the clean transition and ensure that all Europeans benefit from it.
What’s in it for hydrogen?
The CID acts as a basis of Europe’s growth and industrial policy for at least until the end of the decade. Hydrogen plays a central role in decarbonising the EU energy system, particularly in sectors where electrification is not yet viable. The Clean Industrial Deal emphasises the importance of a clear regulatory framework to support hydrogen production and uptake. The Commission will adopt a delegated act on low-carbon hydrogen in Q1 2025 to clarify the rules for producing low-carbon hydrogen, providing certainty to investors.
To accelerate hydrogen production in the EU, the Commission will launch a third call under the Hydrogen Bank in Q3 2025 with a budget of up to EUR 1 billion. Member States are encouraged to use the auctions-as-a-service platform provided by the Commission to facilitate the use of unspent EU funds. Additionally, the Hydrogen Mechanism under the European Hydrogen Bank will be launched in Q2 2025 to mobilise and connect offtakers and suppliers, linking participants with financing and de-risking instruments. This will facilitate the aggregation of offtakers' demand for hydrogen and hydrogen-derived fuels in hard-to-decarbonise industrial sectors and transport, such as maritime and aviation.
The Commission is also launching a study to assess the effectiveness of the hydrogen framework and identify possible barriers to the upscaling of renewable hydrogen. This study will support the review of the delegated act on renewable fuels of non-biological origin.
Links to legislation and additional information
